How to Financially Protect an Unmarried Cohabiting Partner In Case Death – or Life Events – Parts Them

At the moment, marriage is on the decline, at least temporarily. So, more couples are cohabiting or living together.

Generally speaking, that represents freedom from commitment and obligations.

That may be agreeable to both partners, at least for a time. But the time may come when it is not so agreeable, at least to one of them.

Yet by then it may be too late.

For example, a fifty year old Swedish author (Boyfriend) cohabited with Girlfriend. For thirty-two years.

Boyfriend and Girlfriend had no written cohabitation agreement between them and Boyfriend did not have a will.

Boyfriend wrote a trilogy consisting of three novels. He entrusted all three to his publisher simultaneously.

Boyfriend’s trilogy went on to sell kazillion copies and generate a great deal of revenue and income. Sadly, Boyfriend met an untimely death and didn’t live to see that.

At the time of Boyfriend’s death, his estate was worth about $40 million.

Under Swedish law, Girlfriend inherited from Boyfriend … practically nothing. Despite thirty-two years of living together.

Absent legal marriage or a will, a cohabiting boyfriend or girlfriend in much of the United States wouldn’t fare any better than Girlfriend.

Although it appears to have survived to some degree in Canada, the concept of common law marriage has all but faded away in many states in the US.

While both partners may have open eyes regarding their mutual day to day “freedom”, they may not intend to sign up for absolutely nothing in the event of a breakup or death twenty or thirty years into their relationship.

The bottom line is that unmarried cohabitants for the long haul, at least, would do well to ponder their legal position and potential vulnerability in the event of a breakup or their cohabitant’s death.

Even couples who wish to circumvent all the day to day obligations accompanying marriage can still take some fairly simple and straightforward steps to give their long term partner a measure of protection and comfort in the event of one’s death or departure from a lengthy cohabitation.

Those steps are:

  1. A will or trust. A will makes provision in the event of a partner’s death. A trust can make provision in the event of a partner’s death or in the event of a breakup. But it is very important to note that a trust or will can generally be changed at any time as long as the person who made it is still alive and legally competent … without notice to someone who was previously a beneficiary. There may be circumstances and conditions that may render a will or trust irrevocable and unmodifiable. But it’s simpler and more common to go with step 2 …

  2. A cohabitation agreement. This is a contract that spells out both parties’ understanding of their economic rights and obligations arising out of their relationship. The agreement can pertain to their breakup, the death of either partner, or both situations – as well as the death of both partners simultaneously.

Read more in this [Canadian] Financial Post editorial: Don’t wait till death do you part.